Is running a small business worth it? It’s a question all small business owners ask themselves at some stage. The good news is that with a methodical approach of elimination and insight, you don’t have to remain stuck there.
Let’s address the elephant in the room.
Let’s talk about money and small business and the amount of effort it all takes (Ignore the exhausted sigh!).
Honestly...IS RUNNING A SMALL BUSINESS WORTH IT?
It’s the number one question on your mind if the talks with my BYW clients are anything to go by.
Interestingly, it seems to be the case for business newbies and seasoned business owners alike.
Have I been there? YOU BET I HAVE!
I know the feeling of putting in all hours, slaving away, yet feeling there isn’t that much to show for in the bank account.
I consider myself a pretty finance savvy person, both in managing small business finances as with my personal outgoings. (Proof in point, when I approached the bank for a mortgage on a house, they were blown away by my financial breakdowns.)
Yet, I have still asked myself whether it's worth it.
Of course, if even business owners who are quite tuned in to money aren’t exempt, what’s the solution?
Let me say a few things first.
Money And Small Business: A Bit Of A Pep-Talk
If you feel having a small business is hard slog with not enough to show for it, IT’S TOTALLY NORMAL.
I’ve said before that running your own business isn’t for the fainthearted. It’s unavoidable that you will feel like this at certain points along the journey. (No pain, no gain, right!?)
It’s how you navigate it that makes all the difference.
IT IS IMPORTANT YOU ARE ALL OVER YOUR BUSINESS FIGURES.
You really need to track them consistently.
Not because it’s necessarily going to stop you from wondering if running a small business is worth it, but because it will help you claw your way out of that feeling a lot easier.
The state of your bank account is A SYMPTOM, NOT THE CAUSE.
Why a business may have financial problems.... can be caused by a variety of things.
Randomly switching things up here and there, because you can (and it’s your business, so of course you can!) isn’t the best approach.
It’s not because you can that you should.
You can spend months throwing spaghetti at the wall trying to solve a problem while creating another.
SO, before you do anything, there are a few things I need you to check.
4 Money And Small Business Checkpoints
Looking at each of my checkpoints will give you an idea about what levers you need to pull to address your financial worries.
Small business and money checkpoints you need to look at:
1. Do You Have The Right Business Model?
There is more than one way to operate a business.
Think about how you operate and what would happen if you (slightly) tweaked your business model. Especially if it makes your business more scalable, it’s worth considering.
(Tip: Sometimes it needs an outsider to help you see what’s right in front of you.)
2. How Many Hours Do You Spend On Client Work Vs Admin Work?
When you are a small service provider (1-3 people), you probably should spend about 80% on client work and 20% on admin.
It may be a good idea to track this ratio. If you spend more time on admin than on client work, you definitely have an issue that needs attending.
3. Do You Need More Money Or More Clients?
Sometimes you think the answer to the financial challenges of a small business lies in charging a higher price, when in actual fact, what you really need is more clients.
Do you need to increase prices, or do you need to work smarter so you can take on more clients and therefore increasing money coming in?
4. What Are Your Leads And Your Conversion Rate Like?
Sometimes, the financial challenges of a small business are caused by a limping sales process or marketing process.
Ask yourself if you get enough leads. If the answer is no, you need to look at your marketing process.
If on the other hand it’s your conversion rate that‘s not up to scratch (70-80% is a well dialed in conversion rate) you need to have a closer look at changes in your sales process (You can read more on this subject here).
If you want to address your small business and money woes and suspect your sales process is the issue, the positioning-packaging-pricing triangle is a good place to start. All three need to work in tandem to help you get your business ahead.
Without going in to detail, this means it’s important you:
Position your services in the marketplace
Package your services into a product that meets your client’s needs
Price these packages so that your clients choose you based on value rather than on the lowest price. (You can find tips on how to set the price here.)
Do You Need Some Help With That?
So, … Is running a small business worth it?
In the end, the answer to that question is up to you.
To me , it most definitely is. Although I’m not going to pretend it’s always smooth sailing.
What I do want to say is that you don’t have to remain stuck in the financial challenges of a small business and the feeling that, despite your exhausting efforts, you’re getting nowhere.
There is a way through and out of it. All it takes is a methodical approach of elimination and insight.
That said, it often takes a fresh pair of eyes to point out what may be in plain sight.
That’s the case for all of us, me included. (It’s why I have a business coach too, despite being one.)
SO,… if you would like me to have a look at your business to help you identify the cause for your money and small business hurdles, you only have to book A 60 Minute Business Clarity Coaching Session.
You know what to do!
ALSO, don’t forget to leave a review on the podcast so more people can join us. It would mean the world to me!